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Dear Vint, Andrew,<br>
<br>
thank you for your responses. The ambiguity was about "public
support" which I had interpreted as in
<a class="moz-txt-link-freetext" href="https://www.collinsdictionary.com/dictionary/english/public-support">https://www.collinsdictionary.com/dictionary/english/public-support</a>
and not as "financial support" which you clearly explained in your
reply. I thought there was an issue of the Internet Society's
campaigns not gaining the support they needed from the public, and
as a Chapter chair, I was concerned about this because I thought the
Internet Society was doing a reasonably good job given the funds it
had to devote to this and the stringent rules under which it would
use these funds.<br>
I was not aware of the rules that the Internet Society is subjected
to. In some countries, the rules are very different and "public
funding" is defined as subsidies which are received from the
government.<br>
Kindest regards,<br>
<br>
Olivier <br>
<br>
<div class="moz-cite-prefix">On 20/09/2023 16:44, Andrew Sullivan
via Chapter-delegates wrote:<br>
</div>
<blockquote type="cite"
cite="mid:eo7asfgnzcjychlewbwkqokxv3ls5tp2ynllt5qdzrmsufukor@u6midncspcjr">Hi,
<br>
<br>
This note replies to three messages at once, and they're
interleaved, because they're all related. It's also long. I
didn't have time to write a short message, so I wrote a long one
instead. <br>
On Wed, Sep 20, 2023 at 11:49:52AM +0200, Olivier MJ
Crépin-Leblond wrote:
<br>
<br>
<blockquote type="cite">On 15/09/2023 19:59, Andrew Sullivan via
Chapter-delegates wrote:
<br>
<blockquote type="cite">Our income is not keeping up with our
expenses and we have not been able to attract the level of
public support that we need to do, and there isn't anything
else left to cut, so we had to make a difficult decision about
where to retrench.
<br>
</blockquote>
<br>
Thank you for your explanatory note. Always sad to see people
go. One thing that caught my eye was the above sentence which
contains some ambiguities. Would you please be so kind to flesh
this out? I just do not want to misinterpret the first part of
the sentence relating to income and public support.
<br>
</blockquote>
<br>
I'm not entirely sure I get the ambiguity, but it might be that I
used a term of art with "public support". That's a kind of
income. As Vint said in his helpful message…
<br>
<br>
On Wed, Sep 20, 2023 at 07:52:47AM -0400, vinton cerf wrote:
<br>
<blockquote type="cite">Olivier, et al,
<br>
to maintain 501(c)(3) status in the US (ie tax credit for donors
to the
<br>
organization), ISOC has to show broad support from the public.
<br>
</blockquote>
[…]
<br>
<blockquote type="cite">Andrew, please correct me if I have
misstated this.
<br>
</blockquote>
<br>
…under IRS rules, public charities such as ours need to show
"public support". Because the R in IRS stands for "revenue", they
interpret "public support" according to the sources of income that
the charity has. This is the so-called public support test.
Charities demonstrate this in their Form 990 on Schedule A. Our
990s are posted at
<a class="moz-txt-link-freetext" href="https://www.internetsociety.org/about-internet-society/organization-reports/#financial-reports">https://www.internetsociety.org/about-internet-society/organization-reports/#financial-reports</a>.<br>
<br>
The way this test works is complicated, but as Vint said the basic
idea is that a charity should get 1/3 of its income from
contributions that represent 2% or less of the organization's
total income. Things that are not contributions count towards
income but obviously not towards contributions (so they have
negative effects on public support). Things that are
contributions in _excess_ of that 2% go into a category called
"excess contributions", so they also add to the total income but
can have negative consequences for public support. The test works
over a 5 year period.
<br>
<br>
Charities can drop below the 1/3 public support proportion and
remain a charity if they meet certain facts and circumstances, but
under no condition is public support allowed to fall below 10%.
If a charity does fall below 10% in any two years in a row, it
automatically becomes a private foundation (and in the year when
it first fell below 10%, which means that once you cross that
threshold you have to behave as a private foundation anyway).
<br>
<br>
For many years (since before I started in this job), the Internet
Society has used facts and circumstances to justify its charitable
status. The contributions we are able to take from PIR have also
been flat now for many years: we can't take any more money from
PIR or we will fail to meet our obligations and cease to be a
charity. (This is all available to be learned from the 990s, by
the way.)
<br>
<br>
This is why we have been focussed as much as we have been (some of
you have commented on it) on fundraising. The only good way for
us to get out of this situation is to increase the funds available
to us by increasing contributions to the Internet Society. We
have had some successes, but not as much as needed to continue at
the size we were, much less to get to 1/3 of our revenue.
<br>
<br>
We are also obligated to maintain our charitable programs, which
includes continuing to support our community. If we fail to do
that, then we will not have facts and circumstances to point to in
order to demonstrate that we are in fact a charity. This is also,
by the way, why even the tiniest donation on the part of members
-- even $1 -- makes a difference: if an organization has a lot of
donors but they're all giving very small amounts such that the
organization doesn't make 1/3 of its income from those donations,
it still has a strong argument for the IRS that the facts and
circumstances show the organization is a charity and undertaking
charitable activities.
<br>
<br>
All of this said, if our contribution income does not expand, we
cannot take more money from the one source that still has excess
we could claim, and our costs go up, we cannot balance our budget
(and we must). So, we have to cut costs, and that's what we were
forced to do last week. Nothing in my time at the Internet
Society pained me as much as having to do this.
<br>
<br>
The good news is that, in my opinion, reaching 1/3 of our income
from public support should be entirely possible, though not
overnight. If we assume our current budget, which is about
$39M/year, we need roughly $13M in contributions per year. Now,
the greater New York City area has a population just under 20
million. Suppose we could convince _half_ of them to give us 10¢
a month. (Yes, this is absurd. It'd cost you more than 10¢ to
make a 10¢ donation. That's part of the point.) If we were able
to do that, we would have about $12M/year. I am quite confident
that the Internet Society does things that are worth 10¢/month to
people. Now we just need to convince them. That is going more
slowly than I would like, but our emphasis over the last few years
in making our work measurable has been very much with the goal of
convincing donors of the importance of our work.
<br>
<br>
Finally, I will also say, I am not content with the overall size
of our budget. Those who are sometimes lined up against us --
those who want to undermine the Internet -- are nation-states who
can literally print money, and some of the best-capitalized
corporations in the history of capitalism. For our part,
including the Foundation, we have a staff cohort of about 160
people, a total annual budget in the area of $50M, and a small but
devoted community of volunteers. This is a completely uneven
fight, and we need to expand our efforts to remind everyone in the
world that the Internet is a resource to enrich people's lives and
a force for good in society. We're the only people who are
devoted to defending the Internet, and to do that we need
financial resources.
<br>
<br>
On Wed, Sep 20, 2023 at 03:23:38PM +0300, Hank Nussbacher via
Chapter-delegates wrote:
<br>
<blockquote type="cite">On 20/09/2023 14:52, vinton cerf via
Chapter-delegates wrote:
<br>
<br>
Based on:
<br>
<a class="moz-txt-link-freetext" href="https://www.internetsociety.org/wp-content/uploads/2022/12/">https://www.internetsociety.org/wp-content/uploads/2022/12/</a>
<br>
Internet-Society-Action-Plan-2023-EN.pdf
<br>
[cid]
<br>
<br>
73% of ISOC's budget comes from PIR.
<br>
</blockquote>
<br>
The public support test is more complicated than that (see above),
but those figures were accurate for this year's budget.
<br>
<br>
I hope this message is helpful.
<br>
<br>
Best regards,
<br>
<br>
Andrew
<br>
<br>
</blockquote>
<br>
<pre class="moz-signature" cols="72">--
Olivier MJ Crépin-Leblond, PhD
<a class="moz-txt-link-freetext" href="http://www.gih.com/ocl.html">http://www.gih.com/ocl.html</a></pre>
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